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Lycamobile still not liking HMRC

Once a big Tory donor, the cheap-calls-for-immigrants provider is now a big target for the tax man, writes SOLOMON HUGHES

ONE of the Tories’ biggest donors is involved in a 13.8m Euro (£12.4m) dispute with Her Majesty’s Revenue and Customs (HMRC) over offshore cash.

Allirajah Subaskaran is the chairman and owner of mobile phone firm Lycamobile. He and his companies gave the Tories £2.1m between 2011 and 2016.

The latest accounts of the top company in his Lycamobile empire, which has the unusual name “WWW HOLDING COMPANY LIMITED” were released in March. They show his firm has increased the amount put aside to cover an ongoing tax dispute with HMRC by 3.4m Euro (£2.9m) for the latest year.

The dispute HMRC has been going on since 2015. According to the accounts, HRMC is pursuing the Lycamobile group over what it says are millions in unpaid taxes related to the “Controlled Foreign Companies” regime.

This means that HMRC thinks the Lycamobile group owes tax on money moved into an “offshore” business. It is likely this relates to huge amounts held by the Lycamobile group in its branch on Madeira, the Portuguese island. Madeira has special low tax rates and is viewed by many as a tax haven inside the EU.

The Lycamobile group says it does not think it owes the tax, but HMRC has also tried to impose an £8.2m fine over the dispute. Lycamobile is appealing the penalty.

Headquartered in London’s former docklands, Lycamobile sells cheap mobile phone calls, marketing the business especially at migrant workers who want to “phone home.” It is a big business with a 443m Euro (£397m) annual turnover.

It is also involved in multiple disputes with HMRC over unpaid tax, including corporation tax, VAT, PAYE and national insurance. The latest accounts of “WWW HOLDING COMPANY” also say that the auditors have “qualified” their opinion because they only had “limited” evidence about 287m Euros (£257m) supposedly held by its subsidiary on Madeira.

Lycamobile stopped donating to the Tories in 2016, after I and other journalists began raising questions over its tax affairs. However, it does still have Conservative Party links: Lycamobile pays Hawthorn Advisors, a company founded and part-owned by Tory Party co-chairman Ben Elliott, as its advisors and lobbyists.

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